1. Technical Field of the Invention
This invention relates generally to financial transaction processing systems and more particularly to incentive offers, services, and/or features within such systems.
2. Description of Related Art
Millions of credit card transactions are accurately processed every day regardless of whether the purchaser is making a purchase in his/her home town, in another part of the world, or via the internet. Each transaction has a two stage process: authorization and clearing & settlement. Authorization is the process of approving or declining the transaction at the commencement of the transaction and clearing & settlement is the process of making the payment and accounting for the payment.
The authorization process begins when a point-of-sale terminal (physical for in-store purchases, virtual for internet purchases) reads a purchaser's credit card information and obtains a transaction amount. The terminal transmits the credit card information and the transaction amount to an acquirer bank, which combines the credit card information and the transaction amount into an authorization request. The acquirer bank transmits the authorization request to a proprietary transaction processing network (e.g., VisaNet®), which routes the authorization request to an issuer bank (i.e., the bank that issued the credit card). Alternatively, the proprietary transaction processing network may perform a stand-in review and authorization.
When the authorization request is sent to the issuer bank, the bank, or a designated third party, reviews the request and approves or denies it. The issuer bank transmits a response to the proprietary transaction processing network indicating its decision. The proprietary transaction processing network forwards the response to the acquirer bank, which in turn, forwards the response to the point-of-sale terminal.
The clearing & settlement process begins with clearing, which, in turn, begins when the point-of-sale terminal, or other merchant processing device, transmits sales draft information (e.g., account numbers and amounts) to the acquirer bank. The acquirer bank formats the sales draft information into a clearing message that it transmits to the proprietary transaction processing network. The network transmits the clearing message to the issuer bank, which calculates settlement obligations of the issuer bank, processing fees, and the amount due the acquirer bank. Settlement begins when the issuer bank transmits funds to a designated bank of the proprietary transaction processing network, which, after processing, transfers the funds to the acquirer bank.
In an alternate credit card transaction processing system, the proprietary transaction network is owned by a single issuer bank. Thus, in contrast with the previously described system, the alternative system includes only one issue bank, not a large number of issuer banks, and, as such, the issuer bank's functions and the proprietary transaction network functions previously discussed are merged. In this alternate system, the processing of the single issuer is less than the multiple issuer system but creates a processing bottleneck due to the single issuer.
Regardless of the type of credit card transaction processing system, such systems provides consumers, whether individuals, small companies, or large corporate entities, an easy mechanism for paying for goods and/or services. In an effort to promote use of credit cards for purchasing goods and/or services, issuers, merchants, and/or the transactional processing entities (e.g., Visa( )) offer a variety of incentive programs. For example, a transaction processing entity may offer incentive programs relating to a particular merchant, by a particular category of goods and/or services from some merchants, by a type of incentive program (e.g., free shipping), and/or by features (e.g., lost/stolen card reporting). As another example, merchant's may offer discounts, free shipping, save $X on purchases greater than $Y, etc. As yet another example, an issuer may offer features such as Z % annual bonus, AA % reward on travel or entertainment, etc.
Such merchant offers, issuer features, and/or transactional processing entity services are managed in multiple areas of a financial transaction processing system due to different incentive programs targeting different market needs for issuers and/or merchants. As such, there are many incentive program opportunities for merchants and/or issuers to participate in, but do not because they are unaware of them or are unable to access them due to the multiple area management.
Therefore, a need exists for a method and apparatus of providing an integrated offers, features, and/or services.